On February 29, Beijing time, data released by the National Bureau of Statistics of China showed that due to the outbreak of new coronavirus pneumonia, China ’s manufacturing purchasing manager index (PMI) for February was 35.7%, a 14.3 percentage point decrease from the previous month; Manufacturing business activity index was 29.6%, a decrease of 24.5 percentage points from the previous month.

Zhao Qinghe, senior statistician of the Service Industry Survey Center of the National Bureau of Statistics of China, believes that the manufacturing PMI in February has the following characteristics:

First, the industries that protect basic people’s livelihood are relatively affected. In February, the PMIs of 21 industries in the manufacturing industry all fell into the contraction range, but each industry was affected differently. Among them, chemical fiber, general equipment, special equipment, automobile and other industries PMI fell below 30.0%; supported by the policy of stable production and supply to support the basic living needs of the people, agricultural and sideline food processing, food and wine refined tea and other industries PMI Maintaining above 42.0%, the PMI of the pharmaceutical manufacturing industry that provides health and medical protection is 39.7%, which is higher than the overall level of the manufacturing industry and is relatively less affected.

Second, the decline in the new orders index was smaller than the production index. The production index and new order index were 27.8% and 29.3%, down 23.5 and 22.1 percentage points from the previous month. The new order index was 1.5 percentage points higher than the production index, indicating that the demand for manufacturing was relatively good. Among the 21 industries surveyed, the new order index of 15 industries such as agricultural and sideline food processing, food and alcoholic beverages, refined tea, and medicine was higher than the production index, especially the new order index of the agricultural and sideline food processing industry was still in the expansion range.

Third, the pressure on manufacturing import and export has increased. The new export order index and import index were 28.7% and 31.9%, down 20.0 percentage points and 17.1 percentage points from the previous month. Some surveyed companies reported that due to the impact of the epidemic, order cancellations and delays in delivery have increased.

Fourth, the PMI of large, medium and small enterprises generally fell. The PMIs of large, medium, and small enterprises were 36.3%, 35.5%, and 34.1%, down 14.1 percentage points, 14.6 percentage points, and 14.5 percentage points from the previous month.

According to comprehensive media reports, China’s economic activity was greatly affected by the epidemic in February. According to the data monitored by the Financial Research Center of the Bank of Communications, since mid-February, the average daily coal consumption of the six major power generation groups has been around 400,000 tons, which is far lower than the level after the Spring Festival in previous years. Compared with the same period last year, the decline has exceeded 40. %. After the Spring Festival holiday, the national steel production and iron powder output fell instead of rising, while iron powder inventory increased significantly, reflecting the apparent weakening of industrial production and downstream demand.

Liu Xuezhi, a senior macro analyst at the Financial Research Center of the Bank of Communications, told the media that the impact of the epidemic on the Chinese economy even exceeded the global financial crisis in 2008. The lowest value of China’s manufacturing PMI was 38.8%, which occurred during the financial crisis in November 2008. However, Liu Xuezhi believes that three factors will drive PMI to rebound after March. First, after the epidemic is effectively controlled, it is expected to improve; second, after production resumes, demand will improve, which will bring the manufacturing boom back to normal; finally, the active support of policies will support the subsequent recovery of the manufacturing industry.

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